Opinion: Tsunamis and Truck Crashes
B>By David Mitchell
I>Director, Risk Control
on Truck Group
Consider the lesson of last winter’s tsunami in Southeast Asia: In terms of frequency, tidal waves have an exemplary record. But what comfort is there in the overall infrequency of tidal waves when just one severe tsunami can kill more than 150,000 people and ruin the lives of millions more?
A fleet that logs 30 DOT crashes may receive an “unsatisfactory” accident rating, even if the crashes resulted in few injuries, no fatalities and a comparatively low total cost of $1 million. Meanwhile, another fleet with the same annual mileage and only 20 DOT crashes on the books, representing fewer than 1.5 crashes per million miles, would receive a “satisfactory” rating — even with 12 injuries, three fatalities and a total cost of $12 million.
This is not to say that the second fleet gets off scot-free, of course. Many attorneys specialize in large-truck crashes and are able to obtain high jury verdicts or settlements. Hundreds of trucking crashes are settled in the $1 million to $10 million range. I know a risk manager for a large fleet who now considers that $5 million is the “working claims layer” for any liability loss.
Severe crashes are very expensive. Your business survival may depend on anticipating the high cost of a severe crash, arranging for appropriate insurance coverage and working to prevent crashes.
Reducing the total number of DOT crashes is an excellent and necessary thing, but when your business goal is to reduce total crash costs and guarantee business survival, you can’t stop there. You also must anticipate the likely and potential total costs of a severe crash; arrange for appropriate insurance coverage; and develop a loss-prevention program for severe crashes.
Unfortunately, most information available concentrates on compliance or trying to prevent all DOT-recordable crashes, with no focus on specifically preventing those expensive severe crashes.
However, preventing severe crashes can be simplified by addressing three priorities: Know which crash descriptions are commonly tied to large liability losses; know the driver habits that often result in severe crashes — and educate drivers about them; and correct driver habits and performance.
My firm studies losses from more than 100 motor carriers every year and can report that the greatest aggregate costs involve six crash descriptions: rear-end impact, lane change, rollover, intersection, U-turn and parking on the shoulder.
These crashes are not the most frequent, but they are the most severe. The losses greater than $10 million I described earlier all resulted from rear-end and lane-change crashes.
As for driver habits, safety directors say there are 10 principal driving errors leading to serious crashes: following too closely, failure to reduce momentum, excessive lane changing, speed too fast for conditions, excessive speed on ramps or curves, failure to get off cruise control, inattention or fatigue, in-cab distractions, inappropriate U-turns and stopping on the highway shoulder.
Natural opportunities for teaching and training drivers about severe crashes include orientation sessions, post-crash training, post-violation training and general safety education sessions. You can use driver trainers, individual counseling, safety videos, audiotapes, newsletters, satellite communication messages, group meetings, independent studies or computer training modules.
Even experienced drivers can develop bad habits, and if you neglect continuing education, they aren’t likely to lose them. Drivers tend to do what management expects. If they are reminded not to make U-turns, they typically will make fewer of them than drivers who didn’t get the safety message.
Unsafe driver habits also may lead to larger settlements and jury awards. Jury verdicts may be based on a truck driver’s previous performance and on fleet management’s failure to counsel, retrain or discipline the offender.
Some fleets have tried to dismiss a driver’s previous crashes by saying they were small or not preventable. This logic has not worked with juries, and the resulting high awards also point to jury anger at fleet management for apparently ignoring bad driver behavior.
Many tools are available to monitor driver performance, including motor vehicle reports, engine electronic control module printouts, collision avoidance system exception reports, satellite communication system reports, road observations from motorists, driver-monitoring services and refresher commentary driving sessions.
By constantly monitoring driver performance, you will be able to take immediate action when a driver shows unsafe habits. Note, though, that monitoring driver performance but delaying or neglecting corrective action puts you in a dangerous position.
If you are adequately insured for the occasional severe crash and work to prevent it, it’s likely your business will not only survive, but prosper.
Aon Corp. of Chicago is an international provider of risk management services, insurance, reinsurance brokerage and other business and financial services.
